Thursday, November 16, 2023

 U.S. Markets

Where we are today

Where we are going in the future


Smart Money - Buys Aggressively!
Capitulation
Despondency
Max-Pessimism 
Depression 
Hope - Silver F
Relief *Market returns to Mean  - Short Term Bonds & MMF

DYI:  Interest rates since March of 2020 have sky rocketed thus smashing the principal value of long term bonds.  Interest rates over the next decade and possibly two will be ever increasing lows with ever increasing highs all pushed by insane fiscal spending with a willing central bank to monetize (inflate) these debts.  Shorter term recessions will come and then go thus having a yo-yo effect upon rates.  It is very possible the U.S. economy is in the beginning threshold of recession thus interest rates over the shorter term will possibly fall.  How low interest rates go will depend upon severity of the recession.  However over the longer term interests will have bias towards ever increasing rates.


Smart Money - Buys the Dips!
Optimism - Gold
Media Attention
Enthusiasm

DYI:  Gold essentially bottomed out – August 1999 at $251.70 – at the top of the Dot.com bubble.  Silver bottomed in November 2001 at $7.18.  The obvious big winner has been gold over this past twenty plus years. As investors what we are most concerned is the Dow to Gold Ratio currently at 17 to 1 with the very long term average at 10 to 1.  With stocks at nose bleed valuation levels gold and its cousin silver will continue to have upside potential all carried out in typical yo-yo fashion.


Smart Money - Sells the Rallies!
Thrill
Greed
Delusional
Max-Optimism  
Denial of Problem - Stocks 
Anxiety 
Fear
Desperation - Long Term Bonds

DYI:  Long term bonds until recently didn’t inspire DYI’s investment formula as interest rates were well below their historical norms.  Now that rates have moved slightly above their historical average investment in this interest generator has merit.

Stocks have been at nose bleed valuation levels for what seems to be eternity for they hold zero merit at this time, only one level from outright max-optimism.

Conclusion:

Stocks hold zero value; long term bonds have modest investment merit; gold/silver outstanding along with short term notes and bills.

Updated Monthly

AGGRESSIVE PORTFOLIO - ACTIVE ALLOCATION - 11/1/23

Active Allocation Bands (excluding cash) 0% to 50%
24% - Cash -Short Term Bond Index - VBIRX
49% -Gold- Global Capital Cycles Fund - VGPMX **
 27% -Lt. Bonds- Long Term Bond Index - VBLTX
 0% -Stocks- Total Stock Market Index - VTSAX
[See Disclaimer]
** Vanguard's Global Capital Cycles Fund maintains 25%+ in precious metal equities the remainder are domestic or international companies they believe will perform well during times of world wide stress or economic declines.  

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Till Next Time

DYI  

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